In the past few years, buying a home in California has acquired a step that didn't used to be necessary: getting an insurance quote during escrow, not after. Here's what's happening and what buyers should do.
What's Changed
Several large national carriers — State Farm, Allstate, and others — have stopped writing new homeowner policies in California or dramatically restricted their California footprint. The driver is wildfire risk and actuarial uncertainty about future losses.
What It Means for OC Buyers
Orange County is not the Sierra foothills — but it's not immune. Areas affected:
- Canyon communities (Coto de Caza, Foothill Ranch, Trabuco Canyon, parts of Laguna Hills and Laguna Niguel)
- Hillside neighborhoods (parts of Anaheim Hills, parts of Orange, upper Irvine)
- Coastal bluff areas — fire risk is lower, but wind events matter
Flat, inland Irvine and most of Anaheim remain easy to insure through standard carriers.
Your Options When the Standard Market Declines
Surplus lines carriers: Available for properties the admitted market won't touch. Typically more expensive, less consumer protection.
California FAIR Plan: The insurer of last resort for wildfire peril. Covers fire only — you'll need a separate "difference in conditions" (DIC) policy to cover theft, water, liability. Total cost can be 2–4x what standard coverage cost.
Shop broadly: Insurance brokers who specialize in high-fire-risk properties in California have access to carriers general agents don't.
What Buyers Should Do
- Get an insurance quote before you remove the inspection contingency — not after. This is now standard practice among informed OC buyers.
- Ask the seller for their current policy and carrier — a non-canceled policy in a hard-to-insure area is material information.
- Check the property's fire hazard severity zone (FHSZ) — included in the Natural Hazard Disclosure. Tier 3 ("Very High") triggers the most difficulty.
- Budget accordingly — if you're looking at a canyon property, budget $5,000–$12,000+/year for insurance.
Insurance complications don't always kill a deal, but they're best discovered early. Get in touch if you're shopping in hillside or canyon OC.
